EasyJet shares rally after 5.4% lift in October traffic
City Index November 6, 2013 2:42 PM
<p>Shares in EasyJet rallied over 2% in early trading on Wednesday after the budget airline carrier saw passenger traffic increase by 5.4% in October. The […]</p>
Shares in EasyJet rallied over 2% in early trading on Wednesday after the budget airline carrier saw passenger traffic increase by 5.4% in October.
The news helped to draw out bargain hunters who have sought to pick up EasyJet shares from around the 1200p level after share prices sold off this week in reaction to a cut in profits at industry peer Ryanair. EasyJet shares have fallen 10% in the last week of trading alone to hit a new two month low of 1194p.
Historically over the past six months whenever shares have traded between the 1180p and 1200p levels, they have attracted buyers and so today’s positive traffic numbers have helped to entice investors to pick shares back up at these levels.
Traders swing trading until a price breakout
The sell off earlier in the week seemed harsh but when taken into consideration the broader price trends, it wasn’t necessarily.
Shares have been in a consolidation phase for the past six months which has taken the wind from the sails of its longer term price rally. Shares have traded within a range of around 15% between 1180p and 1380p for the best part of six months and traders have been happy to swing trade between these levels and wait a breakout for more definitive price action.
Fundamentally EasyJet is trading relatively attractive still to that of its peer group. Shares current trade on a forward 12 month price to earnings ratio of 11.27 compared to its peers of 12.53.
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